Defence ministry bites the bullet, rewrites rules to let private companies make arms

The defence ministry has empowered itself to select private sector companies for production of weapons being bought from foreign vendors under a transfer of technology (ToT) pact with a new set of guidelines that specify qualifying criteria, including experience and financial strength.

The new guidelines under the defence procurement policy have opened up what in the past has been a bastion of public sector units (PSUs) that would be automatically designated as the nominated production agency for ‘Buy and Make’ category of purchases.

In theory, the new guidelines empower the ministry to now select private sector companies for contracts in which a weapon system is to be mass produced in India after purchasing technology from a global firm.

In the past, such contracts like the Kamov 226 helicopter program and the aborted deal for Medium Multi Role Combat Aircraft (MMRCA) that had been won by Dassault’s Rafale had Hindustan Aeronautics Limited (HAL) as the production agency. Read More

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